Opinion
CS12-03524 Petition 23-04870
10-15-2024
C W, Petitioner, v. VD K P, Respondent.
Petitioner C. W., represented by Zachary Berl, Esquire. Respondent K. P., represented by Alaina Chamberlain, Esquire. Ryan, J.
Date Submitted: July 17, 2024
Petitioner C. W., represented by Zachary Berl, Esquire.
Respondent K. P., represented by Alaina Chamberlain, Esquire. Ryan, J.
SPECIFIC PERFORMANCE DECISION AND ORDER
PAULA T. RYAN, JUDGE
INTRODUCTION
Pending before the Court is a Petition for Specific Performance filed by C.W. ("Ex-Husband") against K. P. ("Ex-Wife"). Ex-Husband alleges Ex-Wife's lack of compliance with the provisions of an agreement or contract regarding division of the marital residence property in Milford, Delaware.
Petition for Breach of Contract or Specific Performance, D.I. 20.
FACTUAL AND PROCEDURAL BACKGROUND
Marital Residence
The parties were married on September 26, 1997. Ex-Husband filed a Petition for Divorce on December 28, 2012, but did not seek for the Court to retain ancillary jurisdiction over property division or other matters ancillary to the divorce. In her Answer, Ex-Wife stated "I agree to divorce petition" but like Ex-Husband, she did not request that the Court retain ancillary jurisdiction over property division. The parties were divorced by final decree of the Court on March 21, 2013.
Petition for Divorce, D.I. 1 (marriage certificate).
Id.
Answer to Divorce Petition, D.I. 4.
Divorce Decree, D.I. 9. Both parties were self-represented for the divorce proceedings.
The parties and their children had been residing together in the marital residence, located at ____ _____ ____ ____, since September of 2003. The parties purchased the lot in 2002 for approximately $39,000.00, with Ex-Husband contributing funds from the sale of his home in Fenwick Island and Ex-Wife contributing funds from cashing out a CD. The parties then obtained a loan of $230,000.00 to $240,000.00 to construct the home on the property, and both the lot and mortgage were in both parties' names. At some point in 2005, the parties obtained a Home Equity Line of Credit ("HELOC") loan in the amount of approximately $70,000.00, which was also in both of their names. Ex-Husband testified that these HELOC funds were used to finish the second floor of the home, to purchase an adjacent lot, and to purchase a vehicle.
Ex-Husband Exhibit 2 (Wells Fargo Home Mortgage Statement dated August 26, 2013 (mortgage in both names)).
Ex-Husband Exhibit 1 (USAA Home Equity Line Statement dated June 21, 2014).
The adjacent lot was also in both parties' names.
In July of 2013, approximately four months after the divorce was finalized, Ex-Husband moved out of the marital residence while Ex-Wife and their three minor children remained in the home. According to Ex-Husband, the parties had a verbal agreement that Ex-Wife would reside in the home with the children and be responsible for all home-related expenses that they had previously been paying jointly. Ex-Husband testified that he "offered" to be responsible for landscaping, painting, and minor home repairs, and claimed that the parties agreed to sell the home after their youngest son graduated high school. Ex-Husband acknowledged that he only mowed the lawn one time because Ex-Wife no longer wanted him on the property and wanted the boys to do the yard and home maintenance. According to Ex-Wife, when Ex-Husband moved out, they agreed that she and the children would remain in the home and that she would be responsible for home-related expenses, while he would pay child support and the HELOC monthly payments.Ex-Wife testified that Ex-Husband "came up with the amount" of $1,500.00 per month in child support, but while Ex-Husband acknowledged that he agreed to pay child support, he denied that he had ever proposed or agreed to pay $1,500.00 each month. Rather, Ex-Husband claimed that his child support obligation was supposed to be determined in Court, but that Ex-Wife never filed anything until 2016.
The parties have three sons: J-, G------, and C-. At the time of the divorce, J- was 14 (DOB -/-/99), G------ was 13 (DOB -/-/00), and C-- was 10 (DOB -/-/03).
C- graduated high school in June of 2021.
Ex-Wife testified that Ex-Husband moved out because he "wanted out" and did not want the responsibilities of the house or the children.
Ex-Husband testified that he never earned more than $40,000.00 annually as a social worker and could never have afforded child support of $1,500.00 per month.
In September of 2013, Ex-Wife refinanced the mortgage on the marital residence in her sole name, and Ex-Husband signed a quitclaim deed so the property was in Ex-Wife's name only.According to Ex-Husband, he agreed to Ex-Wife's refinancing because of favorable interest rates, but claimed that this refinance was only supposed to be for a 20 year term, not a 30 year term, and that the refinanced loan amount was not supposed to exceed the principal balance of the original mortgage. Notwithstanding the refinancing in Ex-Wife's sole name and his signing of the quitclaim deed, Ex-Husband testified that he believed his interest in the home would be preserved and he would receive his "share" of the equity when the parties' youngest son graduated high school and the home was sold. However, Ex-Wife testified that there was never any discussion or agreement between the parties about limiting the term or amount of the refinanced loan, nor was there any discussion or agreement about selling the home when their youngest graduated high school or that Ex-Husband would receive any proceeds from the sale. Rather, Ex-Wife testified that before signing the quitclaim deed, Ex-Husband agreed that he would pay $ 1,500.00 per month in child support and would continue to make the monthly payments on the HELOC.
See Ex-Husband Exhibit 2 (Wells Fargo Home Mortgage Statement dated August 26, 2013 (mortgage in both names); Ex-Husband Exhibit 3 (Quitclaim Deed dated 9/27/13); and Ex-Husband Exhibit 4 (Flagstar Mortgage Statement dated October 10, 2013 (Ex-Wife's refinanced mortgage in her sole name)).
Ex-Husband testified that he looked at this as an "8 year investment" from the time of the divorce (2013) to C-'s graduation from high school (2021). Ex-Husband testified that when he signed the quitclaim deed, he looked Ex-Wife in the eye and said "don't screw me" to which she responded that she would not. See Ex-Wife Exhibit 8 (text messages November 2022) (Ex-Husband noting that Ex-Wife has 40IK and state pension while all he has is his investment in the house).
Ex-Husband acknowledged that he made monthly HELOC payments until some point in 2014, when he fell and sustained a serious head injury rendering him unable to work in his job as a licensed clinical social worker. Ex-Wife testified that Ex-Husband paid the HELOC until September of 2014, when he sent her a text message saying he was no longer going to make monthly payments on the HELOC. Concerned about potential negative impact on her credit, Ex-Wife began making the monthly HELOC payments, and eventually completed another refinance in 2021 to consolidate the HELOC loan with her existing mortgage. Since refinancing in September of 2013, Ex-Wife has paid all mortgage payments, property taxes, and other expenses for the marital residence, and has also paid the property taxes and homeowner association fees for the adjacent lot.
Although Ex-Wife refinanced the property in her sole name in 2013, the HELOC was kept separate and continued to be in both parties' names.
Ex-Wife Exhibit 2 (Annual Tax Bills - adjacent lot); Ex-Wife Exhibit 6 (The------Homeowners Association Annual Assessments 2014-2019).
Child Support
In 2016, three years after the parties' divorce, on behalf of Ex-Wife, the Division of Child Support Enforcement ("DCSE") filed a petition seeking child support from Ex-Husband to be determined under the Delaware Child Support Formula. At mediation, two calculations were run: one attributing Ex-Husband with the income of a Master-Level Licensed Clinical Social Worker at a rate of $34.56 per hour, and the second attributing him with minimum monthly income of $1,430.00 due to his inability to work following his head injury. The first calculation resulted in a net obligation of $1,414.00 per month, and the second calculation resulted in a monthly support obligation of $21 LOO. The parties agreed to use the second calculation to establish Ex-Husband's support obligation ($211.00 per month) and further agreed to split unreimbursed medical expenses 50/50, with the order effective on November 28, 2016.
Petition for Child Support, D.I. 10.
November 28, 2016 Permanent Consent Order - New Support at 2, 5-6, D.I. 11.
Id.
Id. at 1-2.
As part of this Permanent Consent Order on child support, the Commissioner noted that Ex-Wife "waive[d] the right to Retroactive Support from [Ex-Husband] at this time." Ex-Wife testified that she informed the mediator that Ex-Husband had previously offered to pay $1,500.00 per month but acknowledged that she agreed to waive retroactive support at the mediation. However, Ex-Wife testified that following the mediation, she and Ex-Husband discussed his "back child support" ($1,500.00 per month from July of 2013 to 2016 when petition for child support was filed) and he agreed this amount would "come out of his share of the equity" in the marital residence. Ex-Husband acknowledged that he was responsible for supporting the children, but denied that he had agreed to pay $1,500.00 per month, claiming that he never earned enough as a social worker to afford that amount. However, the evidence at trial was undisputed that Ex-Husband paid no amounts of child support-$1,500.00 per month or otheiwise-until the matter was addressed in this Court in 2016.
Id. at 2.
Ex-Wife Exhibit 1 (Ex-Wife's notes regarding calculation of "back child support"). Ex-Wife testified that Ex-Husband proposed the amount of $1,500.00 for child support when he moved out of the marital residence, and while she believed he would support the children, he ultimately did not pay any monthly payments of child support until DCSE filed the petition in 2016. Ex-Wife testified that "back child support" meant $1,500.00 per month from 2013 (when parties divorced) to the spring of 2016, when she "filed for child support in court."
Sale cf Adjacent Lot
In October of 2019, Ex-Wife contacted Ex-Husband to inform him that there were two offers to purchase the lot adjacent to the marital residence, and the realtor wanted to meet with them to discuss the sale of the lot. Ex-Husband initially responded that he did not care and told Ex-Wife to "do whatever you want" as long as "when the deal is done we get two separate checks." However, the next month, Ex-Husband sent Ex-Wife several text messages indicating that he was not going to go to settlement on the lot without first having a "contract" or "agreement" stating his equity or interest in the marital residence. The parties agreed to meet at Chick-Fil-A to discuss this on December 7, 2019, and signed a handwritten agreement which is discussed in further detail below.
Ex-Wife Exhibit 3 (text messages).
Id. at 2-3.
Id. at 5-8.
Ex-Husband Exhibit 6 (December 7, 2019 Agreement).
At settlement, each party received a check in the amount of $20,764.55 representing half of the proceeds from the sale of the lot.
Ex-Husband Exhibit 5 (December 12, 2019 record of amount paid to Ex-Wife from attorney escrow account).
Separation Agreement
On December 7, 2019, the parties met at Chick-Fil-A in Milford and signed a one-page handwritten agreement that states the following in its entirety:
Draft
12/7/19
I agree to pay C- W-
$39,900 from the sale of----- ------------(at such time it sells)
Additional 50%
of proceeds from
house - after following
debts pd
C- owes
back child support
ortho for 3
medical
HOA ½ on lot
home equity loan
See Ex-Husband Exhibit 6 (December 7, 2019 Agreement).
On the original agreement the amount of "$39,900" is crossed out and "$30,000" is written above it. Ex-Wife explained that this amount was changed to reflect that both parties had contributed to the original purchase of the lot, with Ex-Husband contributing $30,000.00 from the sale of his Fenwick Island home and Ex-Wife contributing $9,900.00 from cashing out a CD. Both parties signed the document but it was not notarized or otherwise witnessed. Neither was represented by counsel at the time this agreement was signed.
Id.
With regard to the marital residence, Ex-Husband claimed that the phrase "at such time it sells" reflected the parties' agreement to sell the home following their youngest son's high school graduation in June of 2021. Ex-Wife disputes this, claiming that there was no agreement as to timing of the sale of the house in the future, as indicated by the indeterminate language "at such time it sells."
With regard to the debts Ex-Husband was to pay before receiving additional proceeds from the sale of the home, both parties were in agreement as to the amounts for "ortho for 3", "medical", and "HOA Yz on lot." However, they did not agree as to the significantly higher amounts for "back child support" and "home equity loan." Ex-Wife's position is that the amount of "back child support" owed by Ex-Husband is $1,500.00 per month from the parties' divorce in 2013 through the spring of 2016, for a total in the range of $65,000.00 to $70,000.00. Ex-Husband's position is that the "back child support" referenced in the December 7, 2019 agreement only pertained to any arrears he might owe when the home was sold, pursuant to the November 28, 2016 Order setting his obligation at $211.00 per month. With regard to the "home equity loan" Ex-Wife's position is that Ex-Husband was to be responsible for the entire amount of the HELOC, as he agreed to pay this when he left the home and Ex-Wife refinanced but ceased making these payments in the fall of 2014. The HELOC had a balance of $67,474.95 as of June 21, 2014.While Ex-Husband is willing to be responsible for some portion of the HELOC debt, he denies that he agreed to pay the entire amount.
Ex-Wife submitted evidence that the orthodontic bills for the three boys totaled approximately $18,000.00, the unreimbursed medical expenses totaled $834.00, and the homeowner association fees on the lot totaled $1,420.00 from 2014 to 2019. See Ex-Wife Exhibit 4 (orthodontic bills); Ex-Wife Exhibit 5 (medical bills); Ex-Wife Exhibit 6 (homeowner association fees for adjacent lot from 2014 to 2019). Ex-Husband agreed that he would be responsible for half of each of these three amounts: i.e. $9,000.00 for orthodontics, $417.00 for medical, and $710.00 for lot homeowner association fees.
See Ex-Wife Exhibit 1 (Ex-Wife's handwritten notes and calculations). Ex-Wife's notes calculate $1,500.00 per month from April of 2013 through February of 2017. DCSE filed a petition for child support in April of 2016, and the child support order was issued on November 28, 2016. Furthermore, Ex-Wife testified that Ex-Husband agreed to pay $1,500.00 per month in child support shortly before signing the quitclaim deed for the marital residence in September of 2013. Thus, the dates of the Court child support proceedings and Ex-Wife's testimony at trial do not exactly correspond with the notes and calculations set forth in her Exhibit 1. In her Response to Ex-Husband's Petition for Specific Performance, Ex-Wife claimed that Ex-Husband owed $68,034.00 in "back child support" and $67,371.00 for the remaining balance of the HELOC. See Response to Petition for Specific Performance, D.I. 30.
Ex-Husband Exhibit 1 (USAA Home Equity Line statement).
Instant Litigation
In March of 2023, Ex-Husband filed a Motion to Reopen and Consolidate seeking to reopen the divorce proceedings for the purpose of retaining ancillary jurisdiction over property division and to enforce the parties' agreements regarding the marital residence. Ex-Husband sought to consolidate the reopened ancillary proceedings with his simultaneously filed Petition for Specific Performance seeking enforcement of the parties' various agreements. Ex-Husband asserted that he wanted to sell the marital residence to obtain his share of the equity in the home, but that Ex-Wife refused to do so, depriving him of his right to his portion of the marital estate. Ex-Husband argued that Ex-Wife's refusal to sell the home and honor the parties' agreements constituted "extraordinary circumstances" or "fraud, misrepresentation or misconduct" warranting reopening of the divorce proceedings
Motion to Reopen and Consolidate, D.I. 18. Ex-Husband claimed that there were multiple "agreements" between the parties regarding property division following their divorce, but acknowledged that the only written agreement was the December 7, 2019 document signed at Chick-Fil-A.
Petition for Breach of Contract or Specific Performance, D.I. 20.
See FAM. CT. R. CIV. P. 60(b)(3) and (6).
In her Response opposing Ex-Husband's Motion to Reopen and Consolidate, Ex-Wife asserted that she had also contributed funds for the purchase of the lot and construction of the marital home, and that there were no agreements between the parties about the sale of the home prior to December 7, 2019. Furthermore, Ex-Wife asserted that after Ex-Husband signed the quitclaim deed and she refinanced the home in her sole name in 2013, he had failed to pay the HELOC and $1,500.00 per month in child support as he had previously agreed to do.
Response to Motion to Reopen and Consolidate, D.I. 23.
Id.
On April 12, 2023 Ex-Husband's Motion to Reopen and Consolidate was denied by a Commissioner of this Court, as he had failed to establish sufficient grounds to reopen under Rule 60(b) and his delay in filing for relief was found to be unreasonable. The Commissioner found that Ex-Husband had an available remedy under Delaware law and his Petition for Specific Performance was referred for judicial consideration. '
April 12, 2023 Civil Disposition - Commissioner, D.I. 24. The Commissioner noted that Ex-Husband's delay in seeking to reopen was not reasonable as it had been over 10 years since the parties divorced, 3 years since they entered the December 7, 2019 agreement, and 2 years since their youngest child graduated from high school, which Ex-Husband alleged was when the home was supposed to be sold.
Id. at 2.
On May 17, 2023 Ex-Wife filed an Answer to the Petition for Breach of Contract or Specific Performance asserting that the only enforceable agreement between the parties was the December 7, 2019 agreement signed at Chick-Fil-A. Ex-Wife claimed that there was no agreed upon timeframe for the sale of the marital residence, which was in her name only after the September 2013 quitclaim deed. Moreover, while Ex-Wife had paid the mortgage and all home-related debts and expenses for the past ten years, Ex-Husband had never paid any of the debts he agreed to pay as set forth in the December 7, 2019 agreement. Ex-Wife sought for Ex-Husband to pay her attorney's fees in connection with his "meritless" claims.
Answer to Petition for Breach of Contract or Specific Performance, D.I. 30.
On February 16, 2024, Ex-Husband filed a Motion for Formal Discovery, seeking for the Court to order Ex-Wife to allow an appraiser into the marital residence to determine the current value of the home, and to award Ex-Husband attorney's fees because of Ex-Wife's "bad faith."Ex-Wife opposed this motion, and requested attorney's fees from Ex-Husband. On March 5, 2024, the Court denied the motion and requests for attorney's fees without prejudice, noting that "[i]ssues as to whether an appraisal should be conducted to determine the value of this property are secondary to a determination by the Court regarding the existence of any contract(s) between former spouses and the enforceability of such contract(s)."
Motion for Formal Discovery, D.I. 32.
Respondent's Response to Motion for Formal Discovery, D.I. 33.
March 5, 2024 Order, D.I. 34.
Trial was held on July 17, 2024. Both parties testified but presented no additional witnesses.
LEGAL STANDARDS AND FINDINGS
Pursuant to Title 13, Section 507(a) of the Delaware Code, the Family Court has exclusive jurisdiction over:
the construction, reformation, enforcement and rescission of agreements made between future spouses, spouses and former spouses concerning the payment of support or alimony, the payment of child support or medical support, the division and distribution of marital property and marital debts and any other matters incident to a marriage, separation, or divorce. The Court shall have jurisdiction to resolve any issues resulting from the construction, reformation, enforcement or rescission of an agreement.
Delaware courts have held that marital separation agreements regarding property division and alimony are generally governed by traditional contract principles. Thus, assuming a valid agreement between ex-spouses is found to exist, the Court has the authority to resolve any issues involving the "construction, reformation, enforcement or rescission" of that agreement, including determining whether there has been a breach of the contract, what the appropriate remedies might be, and whether or not to order specific performance of the contract provisions.
See Rockwell v. Rockwell, 681 A.2d 1017 (Del. 1983) (alimony award pursuant to an agreement of the parties is subject to standards generally applicable to the modification, reformation, or rescission of contracts); E.F.L. v. 2002 WL 1929538 (Del. Fam. Ct. Jan. 8, 2002) (Family Court has jurisdiction to construe and enforce separation agreements involving property division); LMH. v. D.S.H., 2005 WL 3662348 (Del. Fam. Ct. June 14, 2005) (parents' agreement to pay college tuition can be enforced by Court according to contract principles); Harry M. P. v. Nina M. P., 437 A.2d 158 (Del. 1981) (while freely made separation agreements are enforceable, change in party's financial circumstances is not a defense to specific performance and does not give Court authority to rewrite the contract); Brown v. Giles-Brown, 1997 WL 878705 at *2 (Del. Fam. Ct. Aug. 20, 1997) (legal test for determining validity, enforceability or rescission of a contract between spouses is governed by the same principles applied generally to all contracts). But see Solis v. Tea, 468 A.2d 1276(Del. 1983) (with regard to child support, Court may reform a parent's contractual obligation by evaluating the agreement according to "best interests of the child"); Morrisey v. Morrisey, 45 A.3d 102 (Del. 2012) (modification of parents' agreement regarding travel during parental visitation is reviewable under "best interests of the child" standard, not contract standard).
Ex-Husband argues that when a time for performance is not specified in a contract, a "reasonable time" should be implied. Therefore, Ex-Husband argues that the Court should order "specific performance" of the provisions of the December 7, 2019 agreement by requiring that the marital residence be put on the market and sold as soon as possible, so that he is able to receive his "share" of this marital asset. Ex-Wife argues that the December 7, 2019 agreement provided that Ex-Husband would receive $30,000.00 from the sale of the house "at such time it sells" and would only receive additional proceeds after he paid five specified debts. In order to determine whether or not specific performance - i.e. the sale of the home - is appropriate, the Court must first determine whether the December 7, 2019 agreement is a valid and enforceable contract.
E.F.L. v. J.M.D., 2002 WL 1929538 at *5 (Del. Fam. Ct. January 8, 2002) (where an agreement does not specify a time for performance, a reasonable time will be implied based on the implied covenant of good faith and fair dealing).
Validity cf the December 7, 2019 Agreement
In Osborne ex rel. Osborne v. Kemp, the Delaware Supreme Court explained the elements for a valid and enforceable contract: (1) the parties intended for the contract to bind them; (2) the contract terms are "sufficiently definite"; and (3) an exchange of legal consideration occurred between the parties.
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010); Eagle Force Holdings, LLC v. Campbell, 187 A.3d 1209, 1212-1213 (Del. 2018) (citing Osborn).
1. Whether the parties intended to be bound by the contract.
When determining whether parties meant to be bound by a contract between them, the Court applies an objective test, examining the contract as a whole and the parties' "overt manifestation of assent" including their "words and actions" leading up to the signing of the contract. In the instant case, it appears the parties did not reach any specific agreement with regard to division of the marital residence until December 7, 2019-over six years after their divorce, Ex-Husband's execution of a quitclaim deed, and Ex-Wife refinancing the property in her sole name. However, in reviewing the parties' communication and actions leading up to December 7, 2019, it appears both parties recognized that Ex-Husband retained some interest in the marital residence notwithstanding the quitclaim deed and Ex-Wife's refinancing in her sole name. The written agreement itself was the direct result of Ex-Husband refusing to cooperate with settlement on a jointly owned adjacent lot until he had a written "contract" stating his equity or interest in the marital home.
Eagle Force Holdings v. Campbell, 187 A.3d at 1229-1230.
See Ex-Wife Exhibit 3 (Text Messages October to December 2019).
Id.
When the parties met at Chick-Fil-A on December 7, 2019, their written agreement was an effort to "quantify" Ex-Husband's interest by setting forth what he would receive upon the sale of the marital residence. The parties clearly discussed Ex-Husband receiving his contribution to the purchase of the lot, because they reduced the original written amount from $39,900.00 to $30,000.00 to account for Ex-Wife's contribution. This indicates the parties' mutual acknowledgment that in 2002, both had contributed to the initial purchase of the lot upon which the home was built, and their agreement that Ex-Husband was to receive $30,000.00 "off the top" when the home was sold, representing his contribution.
With regard to intent to be bound by a contract, "a signature 'naturally indicates assent at least in the absence of an invalidating cause such as fraud, duress, mutual mistake, or unconscionability.... "' Although the word "draft" is written in the upper right comer, it appears that the parties intended to be bound by the agreement as both of their signatures appear at the bottom of the one sheet of paper. Although the Court finds that Ex-Husband's refusal to cooperate with the sale of the adjacent lot was the main impetus for the December 7, 2019 agreement, there is insufficient evidence to find that Ex-Wife's signature on this contract was the product of duress. Therefore, the Court finds that both parties intended to be bound by the provisions of the December 7, 2019 agreement, as evidenced by their communications and actions leading up to the agreement, and their signatures on the document.
Eagle Force Holdings v. Campbell, 187 A.3d at 1231 (citing Williston on Contracts §6:1 (4th ed.)). See also Osborn, 991 A.2d at 1158-59 ("The face of this contract manifests the parties' intent to bind one another contractually.").
Eagle Force Holdings v. Campbell, 187 A.3d at 1230 ("where the putative contract is in the form of a signed writing, that document generally offers the most powerful and persuasive evidence of the parties' intent to be bound.").
Cianci v. JEM Enterprise, Inc., 2000 WL 1234647 *10 (Del. Ch. Aug. 22, 2000) (elements of duress are: (1) a wrongful act; (2) which overcomes the will of the aggrieved party; and (3) the aggrieved party has no adequate legal remedy to protect himself or herself)).
2. Whether the terms cf the agreement are sufficiently definite.
In order for the terms of an agreement to be "sufficiently definite", they must "provide a basis for determining the existence of a breach and for giving an appropriate remedy." A Court tasked with determining the existence of a valid contract must find that "the agreement reached constituted agreement on all of the terms that the parties themselves regarded as essential and thus that agreement concluded the negotiations and formed a contract." Unfortunately, this is where the December 7, 2019 agreement fails. Although both parties stipulated that the December 7, 2019 agreement was a valid agreement or contract between ex-spouses regarding marital property division, the evidence and testimony presented shows that they have very different interpretations of certain "essential" or "material" terms of this agreement.
Eagle Force Holdings v. Campbell, 187 A.3d at 1232 (citing Restatement (Secona) of Contracts, §33(2) (1981)).
Leeds v. First Allied Connecticut Corp., 521 A.2d 1095, 1096 (Del. Ch. Ct. December 8, 1986). See also M. W. v. A.P., 2014 WL 88779 at *4 (Del. Fam. Ct. March 4, 2014) (considering totality of circumstances, a reasonable negotiator would not conclude that parties had reached agreement on all essential terms, and therefore, no contract was formed).
A handwritten one-page agreement was signed by the parties on December 7, 2019 at the Milford Chick-Fil-A restaurant. This agreement addressed the disposition of proceeds from the future sale of the marital residence, including Ex-Husband's obligation to pay certain debts before receiving additional proceeds after an initial "off the top" payment of $30,000.00. It appears that the parties had an agreement as to the following terms: (1) Ex-Husband would receive $30,000.00 when the home was sold, representing his contribution to the purchase of the lot upon which the home was built; (2) the amounts owed by Ex-Husband for "ortho for 3" (approximately $9,000.00), "medical" ($417.00), and "HOA /2 on lot" ($710.00).
See Ex-Husband Exhibit 6 (December 7, 2019 Agreement). Neither party was represented by counsel at the time the agreement was drafted and signed.
See Ex-Wife Exhibit 4 (orthodontic bills); Ex-Wife Exhibit 5 (medical bills); Ex-Wife Exhibit 6 (The ------ Homeowner Association fees 2014-2019). The Court notes that two of these three agreed-upon amounts (orthodontics and medical) were addressed and enforceable through the November 28, 2016 child support order. See November 28, 2016 Permanent Consent Order - New Support at 2, D.111 ("cash medical support" or medical expenses unreimbursed by insurance allocated 50/50 between the parties).
However, Ex-Wife and Ex-Husband disagreed as to the following significant terms in this brief handwritten document: (1) the timing of the sale of the marital residence, with Ex-Husband asserting that this was to occur following their youngest son's graduation from high school in June of 2021, and Ex-Wife denying that there was any specific timeframe for the sale of the home; and (2) the potentially significant amounts owed by Ex-Husband for "back child support" and "home equity loan" which had to be paid before he would receive any additional proceeds from the future sale of the home after the initial $30,000.00 payment.
With regard to the timing of the sale of the house, Ex-Husband testified that in 2021, when their youngest son graduated high school, he tried to contact Ex-Wife to discuss putting the marital residence on the market, however she refused to discuss anything with him and "kept putting him off." Ex-Wife denied that Ex-Husband raised the issue of selling the house in 2021 and claimed that his only communications in this timeframe involved his retrieval of certain items from the basement of the home. Ex-Wife testified that when the parties signed the agreement on December 7, 2019, there was no discussion about linking the sale of the home to their youngest son's graduation, and she had no intention at that time to sell the house in the near future. Ex-Wife acknowledged that at some point she will have to sell the home but noted that she still currently resides there with two of the parties' three sons.
Ex-Wife Exhibit 7 (Text Messages - March and May of 2021).
With regard to the debts Ex-Husband would be required to pay before receiving any amounts beyond $30,000.00, the parties have significantly different interpretations of the terms of the contract. Five debts are listed in the document, and at trial, the parties only agreed as to the three smaller debt amounts: Ex-Husband was to be responsible for half of the boys' orthodontic ($9,000.00) and medical expenses ($417.00), as well as half the cost of the homeowners' association fees for the adjacent lot ($710.00). However, as to the two larger debt amounts-back child support and the HELOC-the parties' interpretations diverge widely.
Ex-Wife claims that "back child support" meant $1,500.00 per month from 2013 through the spring of 2016, a total of over $68 000.00. However, Ex-Husband claims that "back child support" only pertained to any arrears he might owe when the home was sold, based on the November 28, 2016 Order ($211.00 per month child support obligation). Thus, according to Ex-Husband's interpretation, this amount could be zero assuming he had made all required monthly payments of $211.00 from November of 2016 to the time the house was sold. Therefore, the amount of "back child support" referenced in the agreement could range anywhere from zero to $68,000.00.
See Ex-Wife Exhibit 1 (Ex-Wife's handwritten notes and calculations). See Response to Petition for Specific Performance, D.I. 30.
Ex-Wife claims that the phrase "home equity loan" meant that Ex-Husband was to be responsible for the entire amount of the HELOC (approximately $67,500.00) as he agreed to pay this when he left the home but ceased making payments in the fall of 2014 following his head injury. Conversely, while Ex-Husband testified that he is willing to be responsible for some portion of the HELOC debt, he denies that he agreed to pay the entire amount. Thus, depending upon which party's interpretation is chosen, the HELOC debt referenced in the agreement could be anywhere from some undetermined amount (Ex-Husband) to approximately $67,000.00 (Ex-Wife).
Ex-Husband Exhibit 1 (USAA Home Equity Line statement). The HELOC balance as of June 2014 was $67,474.95.
Ex-Husband acknowledged that he has "memory issues" stemming from his head injury in 2014 as well as a series of other head injuries earlier in his life. These "memory issues" have an impact on Ex-Husband's credibility with regard to his interpretation of the terms of the parties' agreement and his recollections of his past actions and conversations with Ex-Wife.
Based on the parties' completely different positions on these significant terms in their agreement, it does not appear that there was a "meeting of the minds" as to when the home would be sold or as to what amounts, if any, Ex-Husband would receive beyond an initial $30,000.00 sum. Ex-Husband claims that Ex-Wife is in breach of the agreement by refusing to sell the marital residence, while Ex-Wife claims that Ex-Husband is in breach of the agreement because he has not paid any of the five listed debts. Based on the terms of the December 7, 2019 document and the evidence and testimony at trial, the Court finds that there is no basis for determining whether a breach has occurred, nor is there a basis for applying an appropriate remedy such as specific performance by requiring the sale of the marital home.
Ex-Husband's counsel cites to a case that provides that where a time for performance is not specified, a "reasonable time" may be inferred by the Court, and requests that the Court order that the marital residence be placed on the market. See E.F.L. v. 2002 WL 1929538 *5 (Del. Fam. Ct. Jan. 8, 2002). This concept presupposes that a valid and enforceable contract exists and only lacks a timeframe for performance. As discussed in this decision, the Court finds that the December 7, 2019 agreement is not an enforceable contract because there was no agreement between the parties as to several essential and material terms.
3. Whether the agreement is backed by legal consideration.
The third and final element in determining the validity and enforceability of a contract is whether the agreement between the parties is backed by legal consideration. Consideration is defined as:
Something (such as an act, a forbearance, or a return promise) bargained for and received by a promisor from a promisee; that which motivated a person to do something, esp. to engage in a legal act. Consideration, or a substitute such as promissory estoppel, is necessary for an agreement to be enforceable.
"Consideration" definition, Black's Law Dictionary (12th ed. 2024), available at Westlaw.
In this case, there was legal consideration supporting the December 7, 2019 agreement. Upon signing the agreement, the parties were able to move forward with the sale of a jointly owned lot, with each ultimately receiving $20,764.55 in proceeds. Furthermore, upon the eventual sale of the marital residence at some time in the future, each would receive a portion of the proceeds of the sale, with Ex-Husband receiving $30,000.00 "off the top" representing his contribution to the purchase of the lot upon which the home was built, and additional sale proceeds after payment of five listed debts to Ex-Wife.
Conclusion - Agreement Not a Valid Enforceable Contract
While the parties intended to be bound by the December 7, 2019 agreement and the agreement was supported by legal consideration, the Court finds that it is not a valid and enforceable contract because the parties drastically disagree as to several essential terms. These essential and material terms are not "sufficiently definite" to allow the Court to determine the existence of a breach of the contract and the appropriate remedy for such breach.
However, the conclusion that the December 7, 2019 agreement is not a valid and enforceable contract does not render the Court unable to fashion an equitable remedy to resolve this matter. In this case, based on the document itself, the evidence and testimony at trial, and the credibility of the parties, the Court finds that the one clear agreement between the parties was that Ex-Husband would receive $30,000.00 representing his initial contribution to the marital residence property. Therefore, the Court finds it equitable to order that Ex-Wife pay Ex-Husband $30,000.00 representing his interest in the marital residence.
DEL. CODE ANN. tit. 10, §925(15) ("In any civil action where jurisdiction is otherwise conferred upon the Family Court, it may enter such orders against any party to the action as the principles of equity appear to require."). See also J.T.H. v. S.B., 2017 WL 5450742 at *4 (Del. Fam. Ct. November 14, 2017) ("The Court may enter such orders against any party to the action as the principles of equity appear to require."); B. W.D. v. S.S.D., 2012 WL 6765561 at *3 (Del. Fam. Ct. November 26, 2012) ("Courts generally may grant such alternative, additional, incidental, or ancillary relief as is necessary to achieve an equitable result in the particular case."); Davis v. Delaware Health and Social Services/Division cf Child Support Enforcement, 2010 WL 1502659 at *3 (Del. Ch. Ct. April 6, 2010) ("The Family Court's jurisdiction to grant equitable remedies extends to "any civil action" 'where jurisdiction is otherwise conferred upon' it."); Benge v. Oak Grove Motor Court, 2006 WL 345006 at *2 (Del. Ch. Ct. February 7, 2006) (Family Court has authority under Title 10, § 925 to order specific performance and other forms of equitable relief when equity appears to require it); Savage v. Savage, 920 A.2d 403, 409-413 (Del. Ch. Ct. September 7, 2006) (case between exspouses dismissed in Court of Chancery, as issues of property division and the effect of non-payment of child support on ex-husband's interest in a home, fell squarely within the jurisdiction of Family Court).
The Court is unable to determine whether or not Ex-Husband may have any further interest at stake if the marital residence is sold because of the parties' vastly different positions as to the amounts of the debts owed by Ex-Husband to Ex-Wife. Therefore, other than concluding that the December 7, 2019 document is not a valid and enforceable contract because of insufficiently definite essential terms, the Court makes no findings as to the amounts of the two disputed debts of "back child support" and "home equity loan."
CONCLUSION AND ORDER
For the foregoing reasons, Ex-Husband's Petition for Specific Performance is DENIED, and Ex-Wife shall not be required to sell the residence located at ____ _____ _____ ____. However, Ex- Wife shall pay Ex-Husband a total of $30,000.00 on or before April 15, 2025, or according to another mutually agreed upon schedule. Both parties' requests for attorney's fees are DENIED.
IT IS SO ORDERED.